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Cleveland: Downtown & Vicinity Residences Discussion

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Those occupancy rates are pretty damned awesome. What's important to note is that the report included data from the middle of a horrible recession. With the recession easing and more people likely being able to afford going back to school, those occupancy rates are likely to go up. Although it is also possible that some of those rates were buoyed by people who lost their homes, but it's impossible to know how many. What is important is that the housing crisis has not improved dramatically, so the rental occupancy rates might still be high.

 

Moral of the above: there is sufficient demand to build/renovate more apartments, especially downtown and it's adjacent neighborhoods!

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MTS, do you see a large student population presence in shaker square? Do they have an affect on the neighborhood?

 

On the Van Aken/South Moreland side of the square, yes as there are more apartment buildings.

 

At the end of May, you see tons of moving trucks and it appears whole buildings are emptying.  Rince and repeat in August.

 

There are kids from John Carroll and for Univ. Circle instituations who look to the square for housing so we have a good mix of renters and home owners.

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There is a large student population north of the square (along North Moreland and Kemper), isn't there?

Not like in the past.  It appears rents creeped up on the cleveland side of Larchmere/Kemper and it seems people in that block appear to be new to the area/first time renter, but not necessarily students. 

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To get to Cleveland, just take the Shortline Railroad or the National Railroad. And if you can't afford a ticket just jump on a Conrail or a Mainline train.

 

I just started reading the report...these Houston consultants should be checking their facts, or a least the names of major entities.... Below is from Page 17.

 

...The Cleveland transit authority provides public transportation by way of bus or rapid transit train service. There are two railroads that provide commercial train service to Cleveland; the Shortline Railroad and the National

Railroad.

 

The Port of Cleveland is located along the shores of Lake Erie and provides facilities for barges, general cargo and containers, as well as 413,000 square feet of storage facilities. The Conrail, Mainline and Norfolk Southern railways service the port...

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I know funding is still difficult to get but I would think more downtown residential conversions would be happening when all of these buildings are full.  668 was the last one and it was a huge hit.

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I came across a report from december 2009(so its a little old) and it had the Occupancy rates of several buildings.

 

1900 Euclid Lofts: 80 Units, 97%

WT Grant Lofts: 73 Units, 92%

Statler Arms: 295 Units, 84%

Reserve Square: 762 Units, 92%

The Chesterfield: 415 Units, 94%

The Osborn Building: 120 Units, 98%

University Commons: 100 Units, 97%

Heritage Suites: 148 Units, 89%

 

There are several other apartments on the list that are not downtown. Shaker Square seems like a popular spot for students with a few buildings being around 75% occupied by students. The ones listed above all seem to be at least 10% occupied with students. With Statler at 20% and then University Commons being at 99% students and the rest being staff or faculty. It shows how big of an impact CSU students have on downtown residency rates.

 

http://www.csuohio.edu/offices/architect/projects/northcampus/marketingcsu.pdf

 

Chesterfield's at 94% ?? That's pretty surprising. I live at Reserve Square, a leasing manager here told me recently that their doing 'very, very well'. What that means in terms of percent I'm not sure, but its good to see downtown properties doing so well....Now, if only Doug Price would buy Breuer Tower!

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Now, if only Doug Price would buy Breuer Tower!

 

A realtor/broker/investor friend of mine was in on a team that was looking at Breuer Tower a few months ago but he couldn't give me any other details. He did say they were looking at for a residential and hotel conversion. I have heard nothing further from him.

 

The best part of that story to me is that the county is still interested in selling the building. I think they need to lower their price and hunker down or just deflect the criticism.


"Nearly every problem that we have in the USA -- unaffordable health care, prison overpopulation, hyper militarization, climate change, racism, gun violence, poverty, poor education, urban sprawl and others -- cannot be positively addressed because bribery and conflicts of interest are legal under campaign finance laws which protect the uber-wealthy and the narrow self-interests who grossly benefit from our afflictions."

 

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Given those rates you would think there would be more apartments getting built downtown. What's that hold up? Are developers against building new construction in an urban area that is not condos?

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I'm curious about that too.  I would say lack of apartment stock is Cleveland's primary structural problem right now.  But 10 years of building, much of it city-driven, has yielded almost exclusively for-sale units.

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A little birdie told me that K&D is going to make a strong push for Breuer Tower and redevelop it into apartments/hotel. If that goes through it will significantly add to downtown's apartment stock.

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Given those rates you would think there would be more apartments getting built downtown. What's that hold up? Are developers against building new construction in an urban area that is not condos?

 

Financing is still a problem. It's starting to loosen, but there's a lot of projects that have been waiting for several years for the credit markets to loosen up. Cleveland apartments isn't the only area of pent-up demand for credit in this country.

 

A little birdie told me that K&D is going to make a strong push for Breuer Tower and redevelop it into apartments/hotel. If that goes through it will significantly add to downtown's apartment stock.

 

I hope your little birdie is correct. That's one of many, many projects that withered when the financial markets crashed, and has been lying in wait since.


"Nearly every problem that we have in the USA -- unaffordable health care, prison overpopulation, hyper militarization, climate change, racism, gun violence, poverty, poor education, urban sprawl and others -- cannot be positively addressed because bribery and conflicts of interest are legal under campaign finance laws which protect the uber-wealthy and the narrow self-interests who grossly benefit from our afflictions."

 

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^^the overwhelming majority of residential units built in downtown in the last 15 years have been apartments, not for sale. 

 

^ and yes, K&D is still very interested in breuer, whether or not that can be pulled off right now, I don't know.

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Just a quick question, for buildings that are half apartments/condos, half hotel, is the hotel typically on the top half or the bottom half? I would assume the hotel would be on the bottom with residencies up top.

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Correct.


"Nearly every problem that we have in the USA -- unaffordable health care, prison overpopulation, hyper militarization, climate change, racism, gun violence, poverty, poor education, urban sprawl and others -- cannot be positively addressed because bribery and conflicts of interest are legal under campaign finance laws which protect the uber-wealthy and the narrow self-interests who grossly benefit from our afflictions."

 

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^^the overwhelming majority of residential units built in downtown in the last 15 years have been apartments, not for sale.

 

There is a difference between new build and rehab, market wise, and the Crittenden is the only recent apartment building I can think of downtown or anywhere nearby.  Every other new build unit I can think of is for-sale.  And my comment about for-sale units vs apartments referred to new units constructed citywide, particularly those constructed with public financial support. 

 

It seems like the scarce financing tools we have available aren't being properly targeted toward our needs.  I would be interested to know why both the city and its prvate developers continue to build for-sale units in a market that's already awash in them and which needs apartment units so badly.  There is certainly a value to rehabbed apartment units, but it isn't clear to me why that is the only way we can get them to market.

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^^the overwhelming majority of residential units built in downtown in the last 15 years have been apartments, not for sale. 

 

There is a difference between new build and rehab, market wise, and the Crittenden is the only recent apartment building I can think of downtown or anywhere nearby.  Every other new build unit I can think of is for-sale.  And my comment about for-sale units vs apartments referred to new units constructed citywide, particularly those constructed with public financial support. 

 

It seems like the scarce financing tools we have available aren't being properly targeted toward our needs.  I would be interested to know why both the city and its prvate developers continue to build for-sale units in a market that's already awash in them and which needs apartment units so badly.  There is certainly a value to rehabbed apartment units, but it isn't clear to me why that is the only way we can get them to market.

 

Where do you get this stuff?  Seriously??  :wtf:  :wtf:  :wtf:

 

What exactly is our target need?

 

Why do you think developers have not done their due diligence?  Again, it's the not availability of units, it the credit approval process for a condo that is a problem. 

 

This financial melt down has done damage to so many peoples credit its, pathetic.  We, along with every other major city, have units awaiting occupancy, but there aren't enough credit worthy buyers.

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Armchair quarterbacks with a magic wand are always smarter and can get things done faster than people who are actually out there working in the field and know what they are doing.


"Nearly every problem that we have in the USA -- unaffordable health care, prison overpopulation, hyper militarization, climate change, racism, gun violence, poverty, poor education, urban sprawl and others -- cannot be positively addressed because bribery and conflicts of interest are legal under campaign finance laws which protect the uber-wealthy and the narrow self-interests who grossly benefit from our afflictions."

 

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Armchair quarterbacks with a magic wand are always smarter and can get things done faster than people who are actually out there working in the field and know what they are doing.

Agreed.  But you know some people love to sound like a.....

 

uobrokenrecord.jpg

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There's no sense in discussing anything if we already have all the answers, and if those in charge are 100% right 100% of the time.  The current crisis in real estate, to me at least, suggests otherwise.  Why do discussions of policy always amount to "magic wands" of some sort?  There seem to be only two options here:  accept everything the way it is, or be some sort of loony.  I don't want to discuss magic, but I would like to discuss policy if that's OK.

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There's no sense in discussing anything if we already have all the answers, and if those in charge are 100% right 100% of the time.  The current crisis in real estate, to me at least, suggests otherwise.  Why do discussions of policy always amount to "magic wands" of some sort?  There seem to be only two options here:  accept everything the way it is, or be some sort of loony.  I don't want to discuss magic, but I would like to discuss policy if that's OK.

Are you a real estate professional?  Involved in real estate development/conversion/finance?

 

The magic wand comments comes up because you, many times, based on what you've written, seem to think development is easier said than it actually is.

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Easy, fellas, no need to bring the iron fist in here.  I think 327 has a good point.  If occupancy rates are so high on apartments, and it's hard to sell condos, why are we seeing a lot of new condos come on the market?  If market forces were driving the developers' decisions, you would think that almost all new residential downtown right now would be apartments.  Thus, there must be another reason.  It could be that (1) developers are dumb (which is doubtful and I don't think that's what 327 is insinuating, as MTS seems to imply), or (2) there is some other factor in their decision other than market forces (which would be some type of incentive or other public policy pushing them towards condos).  If that is the case, it's surely something worth discussing.

 

Now if the stats say that almost all new residential units have been for rent lately, just post facts and end the argument.  No need to get personal.

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327, Have you considered a third option: serenity?

 

How many for-sale units have come on the market in the last three years?

 

The housing and credit markets may be in worse shape than many people thought just a few weeks ago, as chronic foreclosure and mortgage problems apparently were not fully disclosed until now. Read up on the problems at Bank of America and the continuing downward slide of home prices. Yes, there are economic sectors that are rebounding (namely manufacturing). But housing and credit markets aren't among them.


"Nearly every problem that we have in the USA -- unaffordable health care, prison overpopulation, hyper militarization, climate change, racism, gun violence, poverty, poor education, urban sprawl and others -- cannot be positively addressed because bribery and conflicts of interest are legal under campaign finance laws which protect the uber-wealthy and the narrow self-interests who grossly benefit from our afflictions."

 

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Most of the people I met who own apartments downtown during my apartment hunt are trying to sell them. At the same time, they are having no problem renting them.

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sigh.... but the STAGGERING OVERWHELMING MAJORITY OF ALL RESIDENTIAL UNITS THAT HAVE BEEN BUILT DOWNTOWN IN THE LAST 10-15 YEARS AAAAARRREEEE APARTMENTS. That isn't debateable. It. Is. A. Fact.

 

If the majority of "new construction" that has been built has been condos instead of apartments, it should give you a pretty good idea of the economics of new construction.

 

the "tools, are the tools, are the tools".  And thankfully someone finally figured out, on a policy level... at federal, state, and local levels, that there needs to be more tools available to those that want to rehab existing buildings or they won't do it because the numbers wouldn't work.

 

not all developers are interested in building apartments because they don't want to run them. Managing a 50 to 250+ unit apartment unit takes a considerable amount of staff, time, and money.

 

Why would anyone have been looking to build new construction residential units in downtown cleveland over the last 10-15 years when there were litterally dozens of vacant buildings to pick from that were more economically viable to develop.  I have said this before and I guess I will have to say it again... there is a reason that before the global rug was pulled there were multitudes of new construction projects "on the horizon" downtown... its because we were finally starting (and i emphasize starting) to run low on buildings to rehab.

 

and in the end... WHO GIVES A CRAP if it is rehab or newcon? we have gone from about 2,000 to about 11,000 residents downtown over that time period. what exactly is the "market wise" difference here?  668, bridgeview, and bingham are all rehab, and all as nice as any newcon.  Why?  market rate, is market rate regardless of the shell.

 

By the way... "public financial support" goes into about EVERY building built around here, and without it I don't think we would see anything built at a price (residentially or commrecially) many people in these parts would find even remotely palatable.  And as for policy matters... outside of the "tools" that are out there for everyone, there isn't much to it.  As usual in life, it comes down to $$$. Plain and simple. The numbers work and you move forward or they don't and you move on.  Luckily we have some VERY creative people in this town that have managed to make the numbers work for some deals recently in an unbelievably challenging environment.  But I assure you there is no puppet master who tells people what to do or can "make it happen". There is no political venom to throw at a mysterious incompetent someone.  There is no one sitting in a chair to point the blame finger at.  It's just $. It's just development. And if someone sees how to make a profit off it... they'll build it. If they don't... we'll a bunch a people get all pissy on an internet chatroom and look for someone to blame.

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Thank you. Could not have said it better (and I hadn't!). So, again, thank you. Some of us are actually interested in learning from development experts (rather than arguing with them for the sake of arguing) who are out there actually doing it, or at least trying to do it in a very difficult market.


"Nearly every problem that we have in the USA -- unaffordable health care, prison overpopulation, hyper militarization, climate change, racism, gun violence, poverty, poor education, urban sprawl and others -- cannot be positively addressed because bribery and conflicts of interest are legal under campaign finance laws which protect the uber-wealthy and the narrow self-interests who grossly benefit from our afflictions."

 

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NEW OWNERS INVEST IN ATTRACTIVE UPGRADES AT THE BINGHAM

 

It was less than 90 days ago that Resource Real Estate, Inc., officially assumed ownership of The Bingham located in the Warehouse District of downtown Cleveland, but already the company has made good on its promise to invest in upgrades that enhance the overall appeal of the upscale apartment community.

 

Within the past 30 days, several areas of The Bingham have undergone a facelift. Both the lobby and model have been redesigned and redecorated to reflect a more contemporary décor. LED lighting on the exterior walls illuminate the building in an array of colors during the evening hours. Landscape lighting has also been installed near the building's exclusive dog park to accommodate the large percentage of Bingham residents who currently own dogs.

 

Residents will also now have access to 24/7 concierge/doorman services. The new concierge is available to make dinner reservations, arrange for a car service or to find a housekeeper, personal trainer, massage therapist or even a dog walker. He is also on hand to help the residents organize their closets, home and life. Although the residents pay for the services they book, the arrangements and reservations are complimentary. The concierge staff will also act as a liaison to address all resident requests and questions...

 

http://pr-usa.net/index.php?option=com_content&task=view&id=625318&Itemid=33

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^ and yes, K&D is still very interested in breuer, whether or not that can be pulled off right now, I don't know.

 

I wonder if it was them checking it out the other day?

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^In the Bruer thread a few days ago there was a brief discussion of some out of the ordinary activity in the Rotunda and Tower, and it looked as if people were checking it out.  Nobody knew what was going on so the usual speculation prevailed.  I think that is what Cleveland was referencing.

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Wanted to give this thread a quick bump:

 

My lease at Reserve Square is ending at the end of the month and although I really enjoy living there, I thought it would behoove me to check out a few other places before I resigned.

 

668 Euclid: Still 100% occupied, I put my name a waiting list that was over 100 people long

WT Grant: 100% occupied

The Bingham: 100% occupied, 6 month waiting list for one bedroom

Reserve Square: 100% occupied for one bedrooms, in fact in both towers there are only 2 units available and those are the higher end 2 bedroom units

 

I ended up resigning at Reserve Square. It's good to see the rental market for downtown so strong!

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Great to hear, but not surprised!  It took me all of 3 days to rent my condo...think I should have asked for more rent!

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I've had two friends rent their condos(both got married) out and got way more than I thought their place was worth. Not to mention, it took both of them less than a week to rent them.

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Yeah, I listed mine the day I was moving out figuring it might take some time.  But I got calls that day, scheduled appointments for viewings 2 days later (and other days for other people) and the first person I showed it too - while it was still filthy from me moving out - took it and moved in a week later.  I barely had time to clean the place...and I had to call the other interested parties and tell them I had a renter before I could show it to them.

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Yeah, I listed mine the day I was moving out figuring it might take some time.  But I got calls that day, scheduled appointments for viewings 2 days later (and other days for other people) and the first person I showed it too - while it was still filthy from me moving out - took it and moved in a week later.  I barely had time to clean the place...and I had to call the other interested parties and tell them I had a renter before I could show it to them.

 

Damn!

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Yeah, depending on how the market looks in 5 or so years, we'll have a tough decision to make if we want to sell, rent, or keep our townhome as a second residence.  I don't necessarily like the prospect of being a landlord, but that would definitely be my choice in the current real estate environment!

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If there's such a long list of those wanting to rent, IMO it's not so much a supply and demand issue, but rather it's an issue of not setting the rents at a high enough price.

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If there's such a long list of those wanting to rent, IMO it's not so much a supply and demand issue, but rather it's an issue of not setting the rents at a high enough price.

 

joker-1.jpg

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If there's such a long list of those wanting to rent, IMO it's not so much a supply and demand issue, but rather it's an issue of not setting the rents at a high enough price.

 

I was talking to the assistant manager of my building over the weekend and she said this is the busiest season they've ever had in the 15+ years they've been in the building.  We also got to talking about their pricing and they have been increasing prices steadily to maximize their return.  For example, we have a 2 BR 2 Bath, ~1000 sf apartment on the 17th floor with lake and city views and we pay approximately $915 per month.  She said the one 2 BR place they have available is listed for $1150 and it's on the 10th floor, no lake view.

 

The demand for apartments in downtown Cleveland is extremely high right now and I don't think it's because of low prices.

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I don't either.  There's plenty of excess demand, as there has been for some time.  And it's reasonable to expect rising prices when demand is growing so much faster than supply.

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There's a balance that needs to be applied, but rising prices could have some very positive effects.  Mainly, if prices go high enough, building conversions (perhaps even new builds) into apartments will become a lot more economically feasible (i.e. developers will be able to secure loans).

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There's a balance that needs to be applied, but rising prices could have some very positive effects.  Mainly, if prices go high enough, building conversions (perhaps even new builds) into apartments will become a lot more economically feasible (i.e. developers will be able to secure loans).

 

 

Agreed. Here in Seattle rents have gone up so much the last few years that all you see being built are new apartments. The rents got high enough where the banks felt comfortable making loans again. Not the case for condo prices.

 

Believe it or not rising and high rents promote more apartments.

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I think all of the properties which are vying for a piece of the hotel market pie are in the mix.  Apartments might very well be option B for Bruer, Truman, Schofield, City Club, Huntington.... whichever loses the race to fill the new hospitality demands post CC/MM and Casino(s)

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